The third-quarter loss was $2,633,178 on revenues of $9,369,354 for the period ended September 30. It attributed $338,000 of the lost earnings to an accounting change in the company's three UK wind farms. After preferred dividends, the loss attributable to common shares was $2,709,150 or $0.25 per share. In the year earlier period, the loss on common shares was $2,008,856, or $0.27 per share, on $6,787,400 revenues. New World blames below normal wind speeds and water flows for lowering revenues by an estimated $640,000 in the quarter and $1,100,000 for the first three quarters. Downtime of the Mod-5 turbine in Hawaii, the world's largest operating turbine, also reduced revenues by an estimated $150,000 for these nine months.
New World Entec SA, the company's Mexican affiliate, also operated unprofitably, partly because of last year's peso devaluation. New World's share of the losses, under the equity method of accounting, was $350,525 in the quarter and $530,601 for the nine months.
During the week before its earnings were released, its stock plummeted more than 26% to 1 1/4 during one day of trading, a 52 week low. As recently as in early October, it was trading at between 3 and 3 1/2.
The company, which recently laid off most domestic marketing and technical personnel, blamed the proposal to eliminate the federal production tax credit for wind power. New World's Hank Hermann says the outlook for the company is brighter. It expects to close financing for two Costa Rican power projects -- one of which is a 20 MW wind plant -- in February. He said partial financing is expected from the IFC, a multi-lateral funding agency. In Mexico, he said New World has a new partner based in Monterrey which should enable projects in that country to proceed. Hermann is hopeful, too, that changes in the Mexican government, namely to create an agency to oversee independent power, will speed up wind development there.
Regarding impact of the change in the production tax credit in Washington on the company's stock, an unidentified analyst told Dow Jones that a grandfather clause in the House of Representatives bill would preserve the credit for the company's planned Texas wind plant because the project has already been agreed to in principle. The 40 MW plant is to consist of Enercon turbines from Germany and be financed by a project financing offering of about $40 million.
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